“The type of stimulus being talked about is temporary,” said Nariman Behravesh, chief economist at consultants IHS Inc. “It won’t deliver a sustained increase in growth.”
Texas Representative Kevin Brady, the Republican chairman of the House Ways and Means Committee, said Friday that Congress is on track to deliver a tax bill to Trump in 2017. Brady, in a Bloomberg Television interview, acknowledged the goal is “aggressive” but said there’s “urgency” in terms of the economy and U.S. competitiveness.
Fed Action
As the administration aims to add fuel to the economy, the Federal Reserve is expected to be withdrawing it, according to the poll. Economists forecast that the central bank will raise interest rates once more this year and three times in 2018, each time by a quarter percentage point.
That’s in line with Fed policy makers’ own projections but significantly below levels implied in financial markets.
“To keep the economy on a sustainable path of growth, we need to gradually reduce the monetary stimulus put in place during the recession and recovery,” San Francisco Fed President John Williams said in an Aug. 2 speech in Las Vegas. “If we delay too long, the economy will eventually overheat, causing inflation or other imbalances to emerge.”
Policy makers last increased borrowing costs in June, when they boosted the target range for the inter-bank federal funds rate to a range of 1 percent to 1.25 percent.
This article was provided by Bloomberg News.